Lawrence bought 100 shares of Illumina at the rate of \$420 each and sold the same exactly after one year for \$487.20. If Lawrence had got the same return by investing in a bank, how much would the simple rate of interest have been?

Using the formula for percentage return, we first find the profit per share, which is $487.20 - $420 = $67.20. Assuming this is the simple interest earned on the initial principal over one year, the rate of interest equals (67.20 / 420) * 100, yielding 16%. The simple rate of interest would have been 16%.

• Thanks
• Wrong explanation